Phygital is the way to go for the retailer of the future

In 2017 e-commerce once again broke a number of online records in Belgium – yet we still see that more than 90% of all purchases of physical products are made offline. Traditional retail stores therefore continue to play an important role for Belgian consumers. However, we have noticed that these traditional retailers are losing touch with the so-called Leading Edge Consumers, for whom the benefits of online shopping are often more important. This group of consumers displays typical shopping behaviour that will be adopted in future by the average consumer. The Belgian retail sector can prepare for that future by focusing on the benefits of offline shopping, on integrating those online benefits into traditional stores, and on effective pricing strategies

Online shopping is growing, but offline remains the most important channel

The Belgian e-commerce industry is heading for yet another record year. The official figures for 2017 – which are set to reach 10 billion euros of online spending – will be published at the end of March 2018. However, during the third quarter of 2017 we were already able to observe that 8.7% of the average Belgian's spending on product purchases took place online. When it comes to buying services, we can see that 63.9% of purchases were made online.

Three quarters of Belgian consumers believe that traditional stores will continue to play an important role in the future. This figure remains high among young people (7 out of 10), although nearly half of them are convinced that the role of these traditional stores will become less important. The future of retail lies in a phygital model. This refers to a retail environment in which physical and digital experiences merge together seamlessly and complement each other in order to offer the consumer a single, positive, integrated experience across different channels. We can already see this happening today, as 15% of Belgian consumers opt for click-and-collect applications – and that number is only increasing.

Stay focused on offline benefits

Offline shopping remains important for a large number of Belgian consumers and families. We have found that one third of consumers shop in this way out of habit, while an equal proportion shop offline because they enjoy it as an activity. The main benefit of offline shopping remains its tangible aspect. For 6 out of 10 Belgians, the main reason for shopping offline is the ability to see or touch a product before buying it. This makes it very important for the retailer of the future to provide enough space in the offline shop for customers to look at, feel and try out products.

Activate online benefits in an offline environment

Nowadays, consumers are already introducing a phygital experience into traditional stores by using their smartphone. 36% of Belgians use their phones to search for more information about a potential purchase, and 16% search for online reviews while they are in the store. These elements are increasingly available on digital screens or at online kiosks inside traditional stores.

Pricing is also an important driver for online shopping. Half of consumers are convinced that shopping online saves money, and half also use their smartphone to compare prices while they are in the shop. A clear and integrated pricing strategy that provides customers with information about prices – ideally with a sufficient level of openness – is therefore essential to a positive phygital retail experience.

Finally, 22% of Belgians indicate that they prefer to shop online as they can access a better or more extensive range of products. In-store kiosks or shop staff with access to a digital inventory system may also bring added value to traditional offline stores in this respect.

"We have seen that product delivery is a major stumbling block for e-commerce, whereas in a traditional store you simply take the product straight home with you," says Bert Hendrickx, E-Commerce Specialist at GfK. "However, effective last-mile delivery may represent an additional future benefit of traditional retail: you have all the advantages of offline shopping, such as trying on clothing or trying out products, but you can have them delivered to your home the next day, to a central point in the shopping district one hour later, or even to the boot of your car."

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